Shane Richmond is Head of Technology (Editorial) for Telegraph Media Group. He first joined the Telegraph in 1998 and has been Online News Editor and Communities Editor. He writes about all kinds of technology but especially Apple, iOS, ebooks and ereaders, and digital media.

The Observer: the newspaper equivalent of Salad Cream

About ten years ago Heinz caused uproar by suggesting that they would discontinue Salad Cream because too many people were buying mayonnaise instead. After protests by customers and stories in the national press the company merely relaunched the product, leaving some to speculate that the whole thing had been a publicity stunt.

Now I wouldn't be so cynical as to suggest that the possibility of closing the Observer – a possibility leaked to the Times by someone within Guardian Media Group – was just a publicity stunt. GMG, which is dealing with losses of almost £90m last year, has to think radically.

GMG is owned by the Scott Trust, which has the sole task of ensuring the continued existence of the Guardian. The Observer, which has been owned by GMG since 1993, has no such protection and therefore finds itself in the line of fire.

As with Salad Cream, the fans have started to rally round. There's a campaign to save the Observer on Twitter and one on Facebook too. And of course there's been plenty of media coverage. On Newsnight last night Donald Trelford, editor of the Observer between 1975 and 1993, launched a spirited defence of his former paper, blaming everyone else for its difficulties.

The sticky position in which the Observer finds itself is, according to Trelford, the fault of Saturday newspapers, which are too big, the internet, which is too free, and the Guardian itself, with its pesky Scott Trust protection. Then for good measure he pulled the 'appeal to democracy' argument favoured by threatened old journalists everywhere right now.

Say what you like about Salad Cream, British democracy would be safe even if it disappeared from our shelves.

Without the Observer, he said, "we'd be left with the Sunday Times [...] and the Sunday Torygraph and I can't believe that would be a healthy thing for British democracy".

Yes, he really did call us the Torygraph. The wag.

Where would Sunday liberalism be without the Observer? Trelford dismissed the Independent on Sunday – the other left-leaning quality paper – because it's struggling too. What he didn't mention was that the Indy, unlike the trust-protected Guardian, has to compete in the open market. Why wouldn't it be struggling when it has the comparatively deep-pocketed Guardian to compete with?

It's ironic that Trelford made his comments on the BBC, a publicly-funded hosepipe of liberal news. Is it really surprising that liberals aren't buying the Observer in sufficient numbers when there are so many radio and television channels available that fit their world view? Even the Guardian has begun to turn against the Beeb lately, recognising at last a competitor that is even less subject to the open market than the Guardian itself.

It's possible that we'll see a seven-day Guardian, perhaps with the Saturday paper being the bumper edition and the Sunday version being a little smaller. That would be a sensible decision, particularly since GMG has already begun integrating the staff of the two papers.

However we may see a Salad Cream-style relaunch of the Observer hitting the shops in the coming months. A relaunch would almost certainly deliver a radically different – and thinner – version of the paper. What better way to soften-up the readers and the staff for such a plan than to threaten the demise of the whole paper?